New patent reform bill would streamline appeal process

A bipartisan group of Senators and Congressmen have introduced a new patent …

Congress is once again preparing to try and fix the US patent system. The Patent Reform Act of 2007 was introduced simultaneously in the Senate and House today. Sponsored by Sen. Patrick Leahy (D-VT) and Sen. Orrin Hatch (R-UT) in the Senate and by Rep. Howard Berman (D-CA) and Rep. Lamar Smith (D-TX), the bill is an attempt to update current patent laws.

The new bill is very similar to bills introduced in 2005 and 2006 that failed to pass. It would change the US patent system from its current "first to invent" system to the "first to file" system used in almost every other country. It would also make some changes to how damage awards are calculated in infringement cases.

Another significant change would streamline the process for challenging patents. Currently, anyone wishing to challenge a patent has two options: a lawsuit in a federal district court, or asking the US Patent and Trademark Office to reexamine a patent.

Neither of those two options work very well. Litigation can be prohibitively expensive, and the USPTO's reexamination process is sluggish and unwieldy at best. According to a copy of the bill seen by Ars Technica, the Patent Reform Act would establish a new, post-grant patent review process for disputed patents. During the first year after a patent is issued, anyone can file a "petition for cancellation" that would initiate a review of a patent. After the 12-month period, a review would still be possible, but more difficult to initiate.

Once a review has begun, the presumption of a patent's validity would be put aside for the duration of the review. A "preponderance of evidence" standard would be used to determine whether or not the patent should be upheld, with both parties allowed to present evidence. Once the review process has been concluded, the decision could still be appealed in federal court.

"If we are to maintain our position at the forefront of the world's economy and continue to lead the globe in innovation and production, then we must have an efficient and streamlined patent system to allow for high quality patents that limits counterproductive litigation," said Sen. Leahy in a statement. "This bill is an important step towards achieving that goal."

"High patent quality is essential to continued innovation," added Rep. Berman. "Litigation abuses, especially ones committed by those which thrive on low quality patents, impede the promotion of the progress of science and the useful arts. This is why we must act quickly—to maintain the integrity of the patent system."

Switching from a first-to-invent system to a first-to-file system would be a huge change for the US, and that section of the bill will be the subject of vigorous debate as it moves through Congress. Critics of first-to-file systems say that they inherently favor large companies with the resources to file for patents in a timely manner, while the first-to-invent method theoretically enables the actual inventor to get credit for and receive a patent on his or her original work, regardless of when it was filed.

In contrast, the changes to the patent review process should go down much easier. Most observers agree that the patent process in the US has some serious problems, and as written, the Patent Reform Act of 2007 would do much to fix it.